No. 96-1291
IN THE SUPREME COURT OF THE UNITED STATES
OCTOBER TERM, 1996
DOLORES OUBRE , PETITIONER
v.
ENTERGY OPERATIONS , INC.
ON WRIT OF CERTIORARI
TO THE UNITED STATES OF APPEALS
FOR THE FIFTH CIRCUIT
BRIEF FOR THE UNITED STATES AND THE
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
AS AMICI CURIAE SUPPORTING PETITIONER
GREGORY C. STEWART
General Counsel
J. RAY TERRY, JR.
Deputy General Counsel
GWENDOLYN YOUNG REAMS
Assistant General Counsel
CAROLYN L. WHEELER
Assistant General Counsel
PAUL BOGAS
Attorney
Equal Employment
Opportunity Commission
Washington , D.C. 20507
WALTER DELLINGER
Acting Solicitor General
SETH P. WAXMAN
Deputy Solicitor General
BETH S. BRINKMANN
Assistant to the Solicitor
General
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217
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QUESTION PRESENTED
Whether petitioner's failure to tender back sever-
ance payments to her employer constitutes ratifica-
tion of a waiver of claims under the Age Discrimina-
tion in Employment Act (ADEA), 29 U.S.C. 621 et
seq., notwithstanding the fact that under the ADEA,
as amended by the Older Workers Benefits Protection
Act (OWBPA), 29 U.S.C. 626(f), any waiver must be
knowing and voluntary, and must satisfy specifically
enumerated statutory prerequisites that were not
met by the waiver in this case.
(I)
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TABLE OF CONTENTS
Page
Interests of the United States and the Equal
Employment Opportunity Commission . . . . 1
Statement . . . . 3
Summary of argument . . . . 8
Argument:
An employee does not waive a claim under the
ADEA by execution of a release of claims and re-
tention of severance payments made thereunder,
if the release does not conform to the statutory
prerequisites for a knowing and voluntary waiver
of ADEA claims under the OWBPA . . . . 9
A. The text and structure of the OWBPA establish
that, absent a waiver that meets the OWBPA's
prerequisites, waiver of a right or claim under
the ADEA cannot occur . . . . 10
B. The history surrounding enactment of the
OWBPA demonstrates that Congress did not
intend any ratification exception to the
OWBPA's waiver prerequisites . . . . 17
C. The Court's decision in Hogue requires rejection
of the tender back doctrine under the ADEA . . . . 23
Conclusion . . . . 30
TABLE OF AUTHORITIES
Cases:
Astoria Federal Sav. & Loan Ass'n v. Solimino,
501 Us. 104 (1991) . . . . 14
Blakeney v. Lomas Info. Sys., Inc., 65 F.3d 482
(5th Cir.1995), cert. denied, 116 S. Ct. 1042(1996) . . . . 7, 12
Blistein v. St. John's College, 74 F.3d 1459 (4th
Cir. 1996) . . . . 12
(III)
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IV
Cases-Continued Page
Botefur v. City of Eagle Point, 7 F.3d 152 (9th Cir.
1993) . . . . 27, 28
Brooklyn Savs. Bank v. O'Neil, 324 U.S. 697
(1945) . . . . 15
Constant v. Continental Tel. Co., 745 F. Supp.
1374 (D. C. Ill. 1990) . . . . 22
Fleming v. United States Postal Serv. AMF
O'Hare, 27 F.3d 259 (7th Cir. 1994), cert. denied,
513 U.S. 1085 (1995) . . . . 26, 27
Forbus v. Sears Roebuck & Co., 958 F.2d 1036
(llth Cir.), cert. denied, 506 U.S. 955 (1992) . . . . 22, 25, 28
Grillet v. Sears, Roebuck & Co., 927 F.2d 217
(5th Cir. 1991) . . . . 11, 22
Hogue v. Southern Ry.., 390 U.S. 516 (1968) . . . . . . 9, 24, 26,
27, 28, 29
Home Box Office, Inc. v. Spectrum Elecs., Inc.,
100 F.R.D. 379 (RD. Pa. 1983) . . . . 29
Isaacs v. Caterpillar, Inc., 765 F.Supp. 1359
(C.D. Ill. 1991) . . . . 26, 28
Long v. Sears Roebuck & Co., 105 F.3d 1529 (3d
Cir. 1997) . . . . passim
McKennon v. Nashville Banner Publishing Co.,
513 U.S. 352 (1995) . . . . 2, 24, 28, 29
0'Shea v. Commercial Credit Corp.:
734 F. Supp. 218 (D. Md. 1990), aff'd, 930 F2d 358
(4th Cir.), cert. denied, 502 U.S. 859 (1991) . . . . 22
930 F.2d 368 (4th Cir.), cert. denied, 502 U.S. 859
(1991) . . . . 12, 22
Oberg v. Allied Van Lines, Inc.:
59 Fair Empl. Prac. Cas. (BNA) 769 (N.D. Ill. 1992),
aff `d, 11 F.3d 679 (7th Cir. 1993), cert. denied,
511 U.S. 1108 (1994) . . . . 25-26
11 F.3d 679 (7th Cir. 1993), cert. denied, 511 U.S.
1108 (1994) . . . . 11, 14, 15, 28, 29
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V
Cases-Continued: Page
Raczak v. Ameritech Corp., 103 F.3d 1257 (6th Cir.
1997) . . . . 28
Smith v. Pinell, 597 F.2d 994 (5th Cir. 1979) . . . . 28
Soliman v. Digital Equip. Corp., 869 F. Supp. 65
(D. Mass. 1994) . . . . 16
Taxin v. Food Fair Stores, Inc., 197 F. Supp. 827
(E.D. Pa. 1961) . . . . 29
United States v. Locke, 471 U.S. 84 (1985) . . . . 14
Waksner v. American Motors Sales Corp., 597
F. Supp. 991 (E.D. Pa. 1984) . . . . 28
Wamsley v. Champlin Refining & (Chemicals, Inc.,
11 F.3d 534 (5th Cir. 1993), cert. denied, 115 S. Ct.
1403 (1995) . . . . 7, 11, 15, 16, 17, 23, 26, 27
Widener v. Arco Oil & Gas Co., 717 F. Supp, 1211
(N.D. Tex. 1989) . . . . 22
Wittorf v. Shell Oil Co., 37 F.3d 1151 (5th Cir.
1994) . . . . 12
Statutes and regulation
Age Discrimination in Employment Act, 29 U.S.C.
621 et seq . . . . passim
29 U.S.C. 623(a)(1) . . . . 3
29 U.S.C. 623(a)(2) . . . . 3
7,29 U.S.C. 626 . . . . 3, 9
7(f), 29 U.S.C. 626(f) . . . . 2, 3, 7
7(f)(l), 29 U.S.C. 626(f)(l) . . . . 3, 4, 8, 10, 11, 15,16
7(f)(l)(A), 29 U.S.C. 626(f)(l)(A) . . . . 3, 4, 10
7(f)(l)(B), 29 U.S.C. 626(f)(l)(B) . . . . 3, 4, 5, 7, 10
7(f)(l)(C), 29 U.S.C. 626(f)(l)(C) . . . . 3, 4, 10
7(f)(l)(D), 29 U.S.C. 626(f )(1)(D) . . . . 3, 4, 10
7(f)(l)(E), 29 U.S.C. 626(f)(l)(E) . . . . 3, 4, 10
7(f)(l)(F), 29 U.S.C. 626(f)(l)(F) . . . . 4, 7, 10
7(f)(l)(F)(i), 29 U.S.C. 626(f)(l)(F)(i) . . . . 4, 6, 10
7(f)(l)(F)(ii), 29 U.S.C. 626(f)(l) (F)(ii) . . . . 4, 6, 10
7(f)(l)(G), 29 U.S.C. 626(f)(l)(G) . . . . 4, 6, 7,10,
7(f)(l)(H), 29 U.S.C. 626(f)(l)(H) . . . . 14, 16
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VI
Statutes and regulation-Continued: Page
7(f)(l) (H)(i), 29 U.S. 626(f)(l)(H)(i) . . . . 4, 10
7(f)(l)(H)(ii), 29 U.S.C. 626(f)(1)(H)(ii)
7(f)(2), 29 U.S.C. 626(f)(2) . . . . 4, 10, 11
7(f)(2)(A), 29 U.S.C. 626(f)(2)(A) . . . . 4
7(f)(2)(B), 29 U.S.C. 626(f)(2)(B). . . . 4
7(f)(3), 29 U.S.C. 626(f)(3). . . . 4
7(f)(3), 29 U.S.C. 626(f)(3) . . . . 4, 13
29 U.S.C. 633a . . . . 2
Automobile Dealers' Day in Cart Act, 15 U.S.C. 1221
et seq. . . . 28
Federal Employer's Liability Act, 45 U.S.C. 51
et seq . . . . 24
Older Workers Benefit Protection Act, Pub. L. No.
101-433, 104 Stat. 978 . . . . passim
Tit. II, 201, 104 Stat. 983 . . . . 3
Tit. II, 202(b), 104 Stat. 984 . . . . 19
42 U.S.C. 983 . . . . 28
29 C.F.R. 1627.16(c) (1987) . . . . 19
Miscellaneous
133 Cong. Rec. H12,392 (daily ed. Dec. 21, 1987) . . . . 19
134 Cong. Rec. H8297 (daily ed. Sept. 26, 1988) . . . . 19
135 Cong. Rec. H7618 (daily ed. Oct. 26, 1989) . . . . 19
136 Cong. Rec.:
p. H8738 (daily ed. Oct. 3, 1990) . . . . 20
p. S13,607 (daily ed. Sept. 24, 1990) . . . . 20
p. S13,611 (daily ed. Sept. 24, 1990) . . . . 20
52 Fed. Reg. 32,293 (1987) . . . . 19
H.R. Rep. No. 664, 101st Cong., 2d Sess. (1990) . . . . . . . 18, 19,
20, 23, 25, 27
S. Rep. No. 263, 101st Cong., 2d Sess. (1990) . . . . 18-19,20,21 23
S. Rep. No. 79, 101st Gong., 1st Sess. (1989) . . . . 18
Restatement (Second) of Contracts . . . . 14, 15, 17
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In the Supreme Court of the United States
OCTOBER TERM, 1996
No. 96-1291
DOLORES OUBRE, PETITIONER
v.
ENTERGY OPERATIONS, INC.
ON THE WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
BRIEF FOR THE UNITED STATES AND THE
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
AS AMICI CURIAE SUPPORTING PETITIONER
INTERESTS OF THE UNITED STATES AND THE
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
This case arises out of an action brought by an em-
ployee under the Age Discrimination in Employment
Act (ADEA), 29 U.S.C. 621 et seq., alleging that she
was constructively discharged on account of her age.
The court of appeals summarily affirmed the district
court's ruling that petitioner's claim under the
ADEA is barred. The lower courts' rulings were
based on circuit precedent holding that, although a
release of claims executed by an employee does
not, by itself, constitute a knowing and voluntary
(1)
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2
waiver of claims within the meaning of the ADEA, as
amended by the Older Workers Benefit Protection
Act (OWBPA), 29 U.S.C. 626(f), an employee's ADEA
claim is nonetheless waived if the employee retains
severance payments that were made in conjunction
with the release. In the view of the courts below, re-
tention of severance benefits ratifies an earlier,
otherwise invalid, ADEA release and is not subject to
the requirements of the OWBPA. The court of ap-
peals' ruling thereby substantially affects the statu-
tory scheme fashioned by Congress to govern older
workers' rights under the ADEA.
The Equal Employment Opportunity Commission
(EEOC) has a strong interest in ensuring that the
ADEA and the OWBPA are correctly interpreted to
serve their intended purposes. The EEOC has pri-
mary responsibility for administering and enforcing
the ADEA and has an interest in the effectiveness of
the entire congressional plan for eradicating age dis-
crimination, including private actions by employees
that further the purposes of the ADEA. The Court
has recognized that " [t]he private Litigant who seeks
redress for his or her injuries vindicates both the de-
terrence and the compensation objectives of the
ADEA." McKennon v. Nashville Banner Publish
ing Co., 513 U.S. 352, 358 (1995). Ensuring that pri-
vate litigants retain their full rights under the
OWBPA to pursue ADEA claims thus furthers the
mission of the EEOC to enforce the ADEA.
The ADEA's prohibition against discrimination on
the basis of age extends to federal agencies. 29 U.S.C.
633a. Thus, the United States, as an employer, is
bound by the OWBPA'S provisions regarding waivers
under the ADEA.
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3
STATEMENT
1. The ADEA makes it unlawful, inter alia, for an
employer "to fail or refuse to hire or to discharge any
individual or otherwise discriminate against any indi-
vidual with respect to his compensation, terms, condi-
tions, or privileges of employment, because of such
individual's age;" or "to limit, segregate, or classify
his employees in any way which would deprive or tend
to deprive any individual of employment opportunities
or otherwise adversely affect his status as an em-
ployee, because of such individual's age." 29 U.S.C.
623(a)(1) and (2).
In 1990 Congress amended the ADEA by enacting
the Older Workers Benefit Protection Act (OWBPA),
Pub. L. No. 101-433, 104 Stat. 978. Title II of the
OWBPA ( 201, 104 Stat. 983) added a new subsection
(f) to Section 7 of the ADEA, 29 U.S.C. 626(f), which
now provides, in relevant part, that " [a]n individual
may not waive any right or claim under [the ADEA]
unless the waiver is knowing and voluntary." 29
U.S.C. 626(f)(l). Section 7(f)(l) further mandates that
"a waiver may not be considered knowing and volun-
tary unless at a minimum," the following specific re-
quirements are met: the waiver must be part of an
agreement written in a manner calculated to be un-
derstood by the average individual (29 U.S.C.
626(f)(l)(A)); the waiver must "specifically refer[] to
rights or claims arising under [the ADEA]" (29
U.S.C. 626(f) (1)(B)); the waiver cannot cover rights or
claims that may arise after the date the waiver is
executed (29 U.S.C. 626(f)(1)(C)); in exchange for the
waiver, the employee must receive consideration in
addition to that which he or she is already entitled (29
U.S.C. 626(f)(l)(D)); the employee must be advised in
writing to consult with an attorney before executing
the agreement (29 U.S.C. 626(f)(l)(E)); the employee
must be given 21 days within which to consider the
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4
agreement (or 45 days if the waiver is in connection
with a termination program offered to a group of em-
ployees) (29 U.S.C. 626(f)(1)(F)(i) and (ii)); the agree-
ment must provide that the employee can revoke the
agreement within seven days after its execution and
that the agreement shall not become effective or en-
forceable until after that period (29 U.S.C. 626(f)(1)
(G)); and, if the waiver is in connection with a termi-
nation program offered to a group of employees, the
employer must (at the commencement of the 45-day
period required under 29 U.S.C. 626(f)(1)(F)) inform
the employee in writing of certain information about
all the persons covered by the program (including
their ages) (29 U.S. Cl. 626(f)(1)(H)(i) and (ii)).
Section 7(f)(2) of the ADEA (also added by the
OWBPA) specifies that the only exception to the Sec-
tion 7(f)(1) prerequisites for a knowing and voluntary
waiver of an ADEA claim is a waiver that is "in set-
tlement of a charge filed with the [EEOC], or an ac-
tion filed in court by the individual or the individual's
representative," alleging age discrimination under
Sections 4 or 15 of the ADEA. 29 U.S.C. 626(f) (2). In
such instances, a waiver "may not be considered
knowing and voluntary unless at a minimum," the
first five requirements of Section 7(f)(1) are met (i.e.,
29 U.S.C. 626(f) (1)(A) through (E)), and the employee
is given a reasonable period of time within which to
consider the settlement agreement. 29 U.S.C. 626(f)
(2)(A) and (B). In any dispute regarding whether the
statutory minimum requirements have been met, "the
party asserting the validity of a waiver shall have the
burden of proving in a court of competent jurisdiction
that a waiver was knowing and voluntary pursuant to
paragraph (1) or (2)" of Section 7(f). 29 U.S.C. 626(f)
(3).
2. a. Petitioner, Dolores Oubre, was employed by
respondent, Entergy Operations, Inc., from 1987 until
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5
the beginning of 1995. Resp. C.A. Br. 6-8. In the
fall of 1994, respondent implemented a new employee
evaluation process that annually ranked its salaried
employees in one of nine groups. Br. in Opp. 2. On
January 17, 1995, petitioner's supervisors notified her
that she had been ranked in the lowest group. J.A.
A18; Resp. C.A. Br. 7-8. They informed her that she
had the option either to resign and receive a
severance package, or to continue employment
pursuant to an action plan that would be developed for
her. Br. in Opp. 2. All employees ranked in the lowest
group were offered the same option. J.A. A17-A18.l
At the January 17 meeting, petitioner was provided
a letter that set forth the terms of the severance
package offered by respondent. J.A. A18; C.A. E.R. 1-
2. Attached to the letter was a release of claims peti-
tioner was required to sign in order to receive the
severance benefits. C.A. E.R. 4. Neither the letter
nor the release specifically referred to claims or
rights arising under the ADEA, as required under 29
U.S.C. 626(f)(1)(B).2 The letter notified petitioner
that she was required to sign the release and return
___________________(footnotes)
1 Petitioner asserts (Pet. 2, 12) that respondent's program
mandated that ten percent of its employees be ranked in the
lowest group. Petitioner also contends (Pet. 2-4) that persons
ranked in the lowest group were informed that if they were
ranked in the lowest group the following year as well, they
would be subject to termination without any severance pay.
And, petitioner alleges (Pet. 3-4) she was told by supervisors
that, although an action plan would be developed for her dur-
ing that following year, it would be virtually impossible for her
to move out of the lowest-ranked group even if she met all the
goals of the plan.
2 The release, nonetheless, purported to apply to all claims,
occurring on or before the date of the execution of the release
"which in any way relate to" petitioner's "employment" with,
or "separation" from, respondent. C.A. E.R. 4.
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6
it no later than February 1, 1595, or the severance
benefits would no longer be available to her. Id. at 2.
Thus, petitioner was not afforded the 45-day period in
which to consider the waiver, as required under 29
U.S.C. 626(f) (1)(F) (ii), in connection with a group ter-
mination program (or even the 21-day period required
in connection with an individual employee termina-
tion, see 29 U.S.C. 626(f)(1)(F)(i)). Neither the letter
nor the release provided petitioner with information
about the other employees covered by the same em-
ployee termination program, as required under 29
U.S.C. 626(f,)(1)(H). And neither the letter nor the re-
lease provided that petitioner could revoke the release
during the seven-day period following its execution or
that the agreement would not become effective or
enforceable until such period had expired, as required
under 29 U.S.C. 626(f)(1)(G).
On January 31, 1995, petitioner informed respon-
dent that she would accept the severance package, and
she signed the release. J.A. A18. Respondent then
made the severance payments under the terms of the
agreement. J.A. A19.
b. In September 1995 petitioner filed suit in the
United States District Court for the Eastern Dis-
trict of Louisiana, alleging that respondent construc-
tively discharged her on account of her age, in viola-
tion of the ADEA, 29 U.S.C. 621 et seq., and various
state laws. Pet. Br. in Opp. 3. Respondent filed a
motion for summary judgment, contending that peti-
tioner had waived her right to bring an action under
the ADEA by virtue of having signed the release and
having failed to return the severance payments she
had received. J.A. A19 Pet. 5. Petitioner opposed the
3 Petitioner received one month of administrative leave,
then one month of base pay plus one week of pay for each year
of accredited service; the cash amount paid to her totalled
$6,258.62. Resp. C.A. Br. 10-11 & n.4.; Pet. 16; C.A. E.R. 1.
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7
motion, contending that the release did not constitute
a knowing and voluntary waiver of her ADEA claim
because the release did not comply with the OWBPA
and because she was under economic duress at the
time she accepted the severance package. Br. in Opp.
3.
The district court entered summary judgment for
respondent. J.A. A17-A21. The court found that it
was "undisputed that the release signed by [peti-
tioner] did not meet some of [the OWBPA's] criteria,
including the requirements that specific reference to
ADEA rights be made, that a waiting period of at
least 45 days within which to consider the agreement
be given and that a seven day period following execu-
tion to revoke the agreement be provided." J.A. A20
(citing 29 U.S.C. 626(f)(1)(B) and (F), and (G)). The
court noted, however, that the Fifth Circuit previ-
ously had held that "the failure to meet the require-
ments of subsections (A) through (H) of the OWPA
does not render the agreement void of legal effect
even though not `knowing and voluntary.' Rather,
such waivers are only subject to being avoided at the
employee's option." Ibid. (quoting in part Wamsley v.
Champlin Refining & Chemicals, Inc., 11 F.3d 534,
539 (5th Cir. 1993), cert. denied, 115 S. Ct. 1403 (1995)).
The court reasoned that, "[according to Wamsley,
where the employee chooses to retain and not tender
back the benefits paid in consideration for the agree-
ment, she manifests an intention to be bound by the
waiver and makes a new promise to abide by its
terms." Ibid. (citing Wamsley, 11 F.3d at 540,
and Blakeney v. Lomas Info. Sys., Inc., 65 F.3d 482
(5th Cir. 1995), cert. denied, 116 S. Ct. 1042 (1996)).
Concluding that it was "not at liberty to disregard
the law announced by the Fifth Circuit," the district
court dismissed petitioner's complaint with prejudice.
Ibid.
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8
3. The court of appeals summarily affirmed. J.A.
A22-A23. Stating that it had reviewed the record and
the parties' briefs and had found no reversible error,
the court of appeals affirmed " for the reasons
enunciated by the district court." J.A. 23.
4. Petitioner then filed a petition for a writ of cer-
tiorari presenting three questions. On April 27, 1997,
the Court granted review limited to the third ques-
tion presented-" [w]hether the petitioner ratified an
otherwise invalid release by retaining compensation
paid and/or failing to tender back said sums received
pursuant to the terms of her separation of employ-
ment, thus making the release binding." 117 S. Ct.
1466; Pet. i.
SUMMARY OF ARGUMENT
The court of appeals erred in ruling that an em-
ployee is barred from pursuing a claim under the Age
Discrimination in Employment Act (ADEA), 29
U.S.C. 621 et seq., by virtue of the fact that the em-
ployee retains severance payments made in conjunc-
tion with a release of claims that does not constitute a
knowing and voluntary waiver of ADEA claims under
the Older Workers Benefit Protection Act (OWBPA),
29 U.S.C. 626(f). Section 7(f)(1) of the ADEA, as
added by the OWBPA, unequivocally states (1) that an
individual "may not waive" any claim under the
ADEA unless the waiver is knowing and voluntary
and (2) that, in order to be considered knowing and
voluntary, a waiver of an ADEA claim must satisfy
detailed statutory prerequisites. There is no statu-
tory exception from the Section 7(f)(1) prerequisites
for cases in which a person retains severance pay-
ments made under a waiver that was not knowing and
voluntary.
The plain language and structure of the OWBPA
are clear on this point. The common law doctrine of
contractual ratification cannot be applied to override
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9
the OWBPA's explicit restriction on the waivability
of ADEA claims. The history and circumstances
surrounding enactment of the OWBPA also demon-
strate that Congress did not intend a ratification ex-
ception to the OWBPA's waiver prerequisites.
An employee need not tender back severance pay-
ments he or she received in conjunction with a pur-
ported ADEA waiver prior to pursuing an action un-
der the ADEA. As this Court ruled with respect to
an analogous statute in Hogue v. Southern Ry., 390
U.S. 516 (1968), a tender back requirement would be
inconsistent with the purposes of the ADEA.
ARGUMENT
AN EMPLOYEE DOES NOT WAIVE A CLAIM UN-
DER THE ADEA BY EXECUTION OF A RELEASE
OF CLAIMS AND RETENTION OF SEVERANCE
PAYMENTS MADE THEREUNDER, IF THE RE-
LEASE DOES NOT CONFORM TO THE STATU-
TORY PREREQUISITES FOR A KNOWING AND
VOLUNTARY WAIVER OF ADEA CLAIMS UNDER
THE OWBPA
There is no question that the release drafted by re-
spondent and signed by petitioner did not include cer-
tain terms that are mandated by Section 7 of the
ADEA, 29 U.S.C. 626, as added by the OWBPA, to
support a knowing and voluntary waiver of claims un-
der the ADEA. See pp. 3-4,7, supra. 4. It is clear from
the statutory text, structure, and history of the
OWBPA, and from this Court's precedents, that a
___________________(footnotes)
4 There is a dispute, however, regarding whether the re-
lease met certain other of the statutory prerequisites, e.g.,
whether petitioner received consideration to which she was not
already entitled. See Pet. 16-17, 19, 23-24; Br. in Opp. 13-14.
The courts below did not resolve that issue, and this Court lim-
ited its grant of review to the ratification issue.
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10
release that does not meet the requirements of the
OWBPA does not constitute a knowing and voluntary
waiver of ADEA claims. An employee can pursue an
ADEA action in such circumstances, regardless of
the retention of severance benefits.
A. The Text and Structure of the OWBPA Estab-
lish That, Absent a Waiver That Meets the
OWBPA's Prerequisites, Waiver of a Right or
Claim Under the ADEA Cannot Occur
1. Section 7(f)(1) of the ADEA, as added by the
OWBPA, unequivocally states that an individual
"may not waive any right or claim under [the ADEA]
unless the waiver is knowing and voluntary." 29
U.S.C. 626(f)(1). Section 7(f) does not leave the term
"knowing and voluntary" undefined. It specifically
prohibits a waiver from being considered "knowing
and voluntary" unless, "at a minimum," the require-
ments listed in Section 7(f)(1)(A) through (H) are met.
The unassailable corollary is that an individual may
not waive any claim or right under the ADEA unless
the requirements listed in Sections 7(f)(1)(A) through
(H) are met.
Under the approach adopted by the courts below,
however, employees waive their rights and claims un-
der the ADEA, even absent satisfaction of the statu-
tory requirements, if the employees retain severance
payments. The OWBPA, however, permits no such
exception to the "knowing and voluntary" waiver pre-
requisites imposed under Section 7(f)(1).5 The lan-
guage and structure of the OWBPA "plainly re-
___________________(footnotes)
5 The only exception to Section 7(f)(1)-set forth in
Section 7(f)(2)-applies to cases that involve settlement of a
charge that already has been filed with the EEOC or of a case
that already has been filed in court (and even then the excep-
tion only modifies slightly the prerequisites for a knowing and
voluntary waiver). That exception is inapplicable here.
---------------------------------------- Page Break ----------------------------------------
11
strict[] an employee's freedom to waive his rights or
claims under the ADEA." Oberg v. Allied Van Lines,
Inc., 11 F.3d 679,683 (7th Cir. 1993), cert. denied, 511
U.S. 1108 (1994). " [A]fter grappling with the question
of whether to permit ADEA waivers at all," Congress
enacted the OWBPA prerequisites and stated
"unequivocally that unless the enumerated require-
ments are met, an individual `may not waive' ADEA
rights." Long v. Sears Roebuck & Co., 105 F.3d 1529,
1539 (3d Cir. 1997).
The fact that Congress created only a single excep-
tion to the Section 7(f)(1) prerequisites, i.e., for cases
pending before the EEOC or in court (29 U.S.C.
626(f)(2)), further reinforces the OWBPA's mandate.
Structuring the statute first to list the threshold re-
quirements for a valid ADEA waiver, followed by a
single exception, demonstrates that Congress did not
intend any other exceptions.
2. Disregard for the OWBPA's clear mandate-
that an individual "may not waive" an ADEA claim
absent a knowing and voluntary waiver-has been ra-
tionalized by the Fifth Circuit under the common law
doctrine of contract ratification. The courts below
followed Fifth Circuit authority that enactment of
the OWBPA in 1990 did not disturb earlier precedent
that an employee's retention of severance benefits
ratifiles an ADEA release. J.A. A20 (citing Wamsley
v. Champlin Refining & Chemicals, Inc., 11 F.3d 534,
536, 540-542 (5th Cir. 1993), cert. denied, 115 S. Ct.
1403 (1995) (applying Grillet v. Sears, Roebuck & CO.,
927 F.2d 217, 220 (5th Cir. 1991))). In Wamsley, the
Fifth Circuit reasoned that: the common law doctrine
of contractual ratification of voidable contracts ap-
plies to ADEA waivers notwithstanding enactment of
the OWBPA; a release that does not constitute a
knowing and voluntary waiver under the OWBPA is
not void, but is merely voidable an employee's reten-
---------------------------------------- Page Break ----------------------------------------
12
tion of severance payments constitutes a choice not to
avoid an invalid release and there by serves as a ratifi-
cation which is a new promise not subject to the
waiver requirements of the OWBPA, and applying the
common law doctrine of tender back to preclude an
ADEA suit unless an employee returns all severance
payments is consistent with the purposes of the
ADEA. Id. at 538-542; see also Blakeney v. Lomas
Info. Sys., Inc., 65 F.3d 482, 484-485 (5th Cir. 1995),
cert. denied, 116 S. Ct. 1042 (1996); Wittorf v. Shell Oil
Co., 37 F.3d 1151,1154 (5th Cir. 1994).'
a. The conclusion that an individual may waive
ADEA claims through ratification of an invalid
waiver flies in the face of the OWBPA'S mandate that
an individual "may not waive" any ADEA claim un-
less pursuant to a knowing and voluntary waiver. Re-
gardless of the applicability of the ratification doc-
trine to ADEA releases in pre-OWBPA cases, "the
enactment of the OWBPA changed the legal landscape
with respect to the release of ADEA claims. In light
of the [OWBPA], * * * the ratification doctrine does
___________________(footnotes)
6 The Fourth Circuit also has applied the contractual rati-
fication theory underlying its pre-OWBPA precedent to an
ADEA case that postdates the OWBPA. Blistein v. St. John's
College, 74 F.3d 1459, 1465 (4th Cir. 1996) (applying O'Shea v.
Commercial Credit Corp., 930 F.2d 358 (4th Cir.), cert. denied,
502 U.S. 859 (1991)). In Blistein, the Fourth Circuit. explained
that, prior to enactment of the OWBPA, the circuits were split
"over how to determine whether an ADEA claim had been val-
idly released''-" [s]everal circuits had adopted a federal com-
mon law `totality of the circumstances' test," while other
courts, including the Fourth Circuit in O`Shea, "had resorted
to ordinary state law contract principles in resolving the ques-
tion," and it concluded that the OWBPA codified the totality-
of-circumstances test. 74 F.3d at 1465. The Third Circuit has
recognized-correctly, in our view-that the OWBPA sup-
plants both of the pre-OWBPA tests. Long, 105 F.3d at 1538 &
nn. 14, 15.
---------------------------------------- Page Break ----------------------------------------
13
not apply to ADEA releases which fail to comply with
the OWBPA." Lena, 105 F.3d at 1534.
In addition to the plain language of the OWBPA's
prohibition on noncomplying waivers, the overall
structure of the OWBPA makes clear that application
of the common law ratification doctrine to ADEA re-
leases would conflict with that scheme. The prereq-
uisites enacted go well beyond common law principles
and require a higher threshold of protection for
waivers of ADEA claims. As a structural matter, the
OWBPA alters the manner of enforcing an ADEA
waiver. Whereas under common law an employee
challenging a waiver bore the burden of establishing
that a waiver was not knowing and voluntary, the
OWBPA imposes on the party asserting the validity
of the waiver the burden of proving that the waiver is
knowing and voluntary. See Long, 105 F.3d at 1539
(citing 29 U.S.C. 626(f)(3)). That approach evidences
an intent on the part of Congress to place the risk of
nonpersuasion on an employer who is seeking to en-
force a waiver, in contrast to ratification which holds
an employee to an obligation that an employer could
not have enforced.
The specific OWBPA prerequisites to a knowing
and voluntary waiver also reflect a displacement of
the ratification doctrine. That doctrine simply "is
logically inconsistent with the specific terms of the
OWBPA." Long, 105 F.3d at 1539 n.17. "To conclude
otherwise would be to say that Congress only in-
tended that the OWBPA requirements apply to the
`first' waiver." Id. at 1539-1540. Indeed, permitting
common law ratification would permit an employer to
do an end run around the entire statutory scheme.
Thus, the common law doctrine of ratification sim-
ply cannot be invoked in disregard of the detailed
statutory framework of the OWBPA. Common law
principles are "not to be applied in defiance of a stat-
---------------------------------------- Page Break ----------------------------------------
14
ute's overriding purposes and logic." United States v.
Locke, 471 U.S. 84, 98 (1985). Here, application of the
common law ratification doctrine is precluded because
it would be incompatible with the statutory scheme of
the OWBPA. See Astoria Federal Sav. & Loan
Ass'n, v. Solimino, 501 U.S. 104 (1991) (refusing to ap-
ply common law doctrine of collateral estoppel to
state administrative findings in ADEA ease inconsis-
tent with congressional intent underlying ADEA).
b. Permitting application of the ratification doc-
trine to ADEA waivers that do not comply with the
OWBPA also is inappropriate because noncomplying
waivers are void, not merely voidable. "The propriety
of calling a transaction a voidable contract rests pri-
marily on the traditional view that the transaction
is valid and has its usual legal consequences until
the power of avoidance is exercised." Restatement
(Second) of Contracts 7, cmt. e (1981). The OWBPA
states, however, that an ADEA waiver "shall not be-
come effective or enforceable until" after expiration
of the seven-day revocation period following execution
of the agreement. 29 U. S. Cl. 626(f)(1)(G). Thus, an
ADEA waiver that does not comply with the OWBPA
is not valid and does not have "its usual legal conse-
quences" that a party must choose to avoid. In order
to have any legal Consequences, an ADEA waiver
must meet the OWBPA prerequisites, including sur-
viving a seven-day period during which the employee
is afforded the right to revoke it. Absent such cir-
cumstances, any purported release of ADEA claims is
without legal effect. See Oberg, 11 F.3d at 685 (ADEA
waiver that does not meet OWBPA prerequisites is
"dead by force of law"): As such, ratification cannot
___________________(footnotes)
7 The Third Circuit has reasoned that whether noncomply-
ing ADEA waivers are void or voidable is not relevant because,
under either characterization, a court still must decide
whether an employee's retention of severance benefits should
---------------------------------------- Page Break ----------------------------------------
15
occur because " [v]oid promises are not legally binding
and thus, are not contracts." Wamsley, 11 F.3d at 539
(citing Restatement (Second) of Contracts 7, cmt. a
(1981)).8
Moreover, it is far from clear that an employee like
petitioner has a "power of avoidance." See Restate-
ment (Second) of Contracts" 7 (1981) (in order to
constitute voidable contract subject to ratification,
party must have power to avoid legal relations created
by contract). The Fifth Circuit's assertion that a
noncomplying ADEA waiver is "subject to being
avoided at the election of the employee," Wamsley, 11
F.3d at 539, cannot be reconciled with the OWBPA'S
plain statement that " [a]n individual may not waive
any right or claim under [the ADEA]" unless the
waiver complies with the OWBPA'S prerequisites. 29
U.S.C. 626(f)(l) (emphasis added). The OWBPA sim-
ply does not permit an employee to elect whether to
avoid an ADEA waiver that does not comply with the
OWBPA.9
___________________(footnotes)
bar his or her ADEA claim or whether tender back is required.
Long, 105 F.3d at 1537. District courts have taken differing
approaches, but a majority of those outside of the Fourth, Fifth
and Seventh Circuits have adopted the Oberg analysis. Id. at
1536 n.12 (citing cases).
8 Contrary to the Fifth Circuit's assertion (see Wamsley, 11
F.3d at 539 n.8), Congress' failure to use the term "void" is of
no consequence. Providing that an agreement is not effective
or enforceable renders the agreement void. And waiver
agreements may be deemed void where the relevant statute
does not label such agreements "void." Brooklyn Sam. Bank
". O'Neil, 324 U.S. 697, 710-713 (1945) (absence of statutory lan-
guage prohibiting waiver of rights under Fair Labor Standards
Act does not preclude finding that such waivers are "void as
contrary to public policy").
9 The Fifth Circuit has suggested that, if noncompliance
with the provisions of Section 7(f)(1) renders an ADEA release
---------------------------------------- Page Break ----------------------------------------
16
c. In any event, even if an ADEA waiver that does
not comply with the OWBPA could be characterized
as merely "voidable," and even if the applicability of
the ratification doctrine to ADEA waivers survived
enactment of the OWBPA, the Fifth Circuit's ap-
proach would still be unsound. There is no support
for its conclusion that ADEA claims can be waived
through ratification that does not comply with the
OWBPA. The Fifth Circuit merely declared, without
citation, that an employee's ratification constitutes a
new promise and " [a]s a new promise that creates a
new obligation, it is not subject to the waiver re-
quirements of 626, and thus, such requirements
___________________(footnotes)
void, there would be no need for Section 7(f)(l)(G) of the
ADEA, 29 U.S.C. 626(f)(l)(G). See Wamsley, 11 F.3d at 539.
The Fifth Circuit misreads Section 7(f)(l)(G). As explained
above, Section 7(f)(1)(G) requires that an ADEA waiver pro-
vide the employee with a seven-day period in which he or she is
entitled to revoke the agreement, and it provides that the re-
lease does not become effective or enforceable until after expi-
ration of that revocation period. Contrary to the premise un-
derlying the Fifth Circuit's interpretation, Section 7(f)(l)(G)
does not serve as a safeguard against releases that do not com-
ply with the other provisions of Section 7(f)(1). Section
7(f)(l)(G)does not apply to such noncomplying releases. It
does not grant an employee the authority to void a non-comply-
ing release because such noncomplying releases already are
void. Rather, Section 7(f)(l)(G) applies to agreements that are
in compliance with all the OWBPA prerequisites and that oth-
erwise meet the statutory threshold for knowing and voluntary
ADEA waivers. It permits the employee a short period within
which to revoke such an agreement prior to its effective date,
for any reason or for no reason, e.g., an employee may change
his or her mind based on the other employees who execute the
agreement, or he may simply suffer from signer's remorse,
quickly changing his mind about the wisdom of the release af-
ter he signs it. See Soliman v. Digital Equip. Corp., 869 F.
Supp. 65, 69 n.14 (D. Mass. 1994).
---------------------------------------- Page Break ----------------------------------------
17
pose no bar to its enforcement." Wamsley, 11 F.3d at
540 n.11.
The Fifth Circuit has acknowledged, however, that
"if the same grounds for avoidance exist when the
new promise is made, the party again enjoys the
power to avoid performance under the new promise."
Wamsley, 11 F.3d at 539 n.7. It cites the Restate-
ment's discussion of the common law doctrine that,
under the ratification doctrine, the "new promise may
itself be voidable for the same reason as the original
promise, or it may be voidable or unenforceable for
some other reason." See Restatement (Second) of
Contracts 385 cmt. b (1981). The Restatement goes
on to explain, by way of example, that some States re-
quire that in order for a new promise of a former in-
fant to constitute ratification of a promise that was
otherwise voidable because entered into while the
person was still an infant, the new promise must be in
writing and signed. Ibid. Similarly, the OWBPA's
dictate that an individual "may not waive" an ADEA
claim unless the OWBPA's prerequisites are met, ap-
plies whether the purported waiver is accomplished
by signing a release, or by ratification. Thus, any
new promise made through ratification is also subject
to the OWBPA.
B. The History Surrounding Enactment of the
OWBPA Demonstrates That Congress Did Not
Intend Any Ratification Exception To the
OWBPA's Waiver Prerequisites
The intent reflected in the OWBPA's clear lan-
guage, mandating compliance with the statutory pre-
requisites and not admitting of exceptions therefrom
for ratification, is evident from the legislative record.
1. The Senate Report makes clear that a waiver
that does not meet the OWBPA's prerequisites is
void, of no legal effect. Thus, the OWBPA "provides
for the first time by statute that waivers not super-
---------------------------------------- Page Break ----------------------------------------
18
vised by the EEOC may be valid and enforceable if
they meet certain threshold requirements and are
otherwise shown to be knowing and voluntary." S.
Rep. No. 263, 101st Cong. 2d Sess. 31 (1990) (S. Rep.
No. 263) (emphasis added). The Senate Report
stresses that all statutory prerequisites must be met,
regardless of other "knowing and voluntary" consid-
erations. Id. at 32. Moreover, it specifies that, be-
cause permitting ADEA waivers that were not super-
vised by the EEOC was a substantial change from
past law, the Senate Committee intended "that the
requirements * * * be strictly interpreted to protect
those individuals covered by the Act." Id. at 31.
(emphasis added)."
2. The intent to protect older workers and to en-
sure that their ADEA claims were not subject to
waiver, absent compliance with the statutory prereq-
uisites, could not be clearer from the legislative rec-
ord. The Senate Report unequivocally states that the
OWBPA was intended to "ensure[] that older workers
are not coerced or manipulated into waiving their
rights to seek legal relief under the ADEA." S. Rep.
No. 263 at 5. It specified that the statutory prerequi-
sites to a valid ADEA waiver were included "with the
intent of according basic due process protections to
employees who are asked to execute waivers." Id. at
___________________(footnotes)
10 The legislative record demonstrates that Congress in-
tended the OWBPA to "limit waivers to certain situations and
then spell[ed] out clear and ascertainable standards to govern
those situations." H.R. Rep. No. 664, 10lst Cong., 2d Sess. 27
(1990). That approach was intended to "clarify an unsettled
area of the law" and eliminate the litigation that had arisen
regarding ADEA releases based on the many different factors
and criteria applied in the former case-by-case approaches
under the totality-of-the-circumstances test and the state-
contract-law test. lbid. see also S. Rep. No. 79, 101st Cong., 1st
Sess. 17 (1989); see note 6, supra.
---------------------------------------- Page Break ----------------------------------------
19
32. The circumstances surrounding the enactment of
the OWBPA reveal that there was no intent to permit
disregard for the restrictions on ADEA waivers
through ratification of waivers that failed to afford
employees the statutory protections. The OWBPA
was enacted against a backdrop that disfavored any
waivers of ADEA claims and that led to authorization
for certain waivers only because of the statutory pro-
tections created.
Prior to enactment of the OWBPA, the EEOC had
promulgated a regulation that permitted waivers of
ADEA claims without supervision by the EEOC so
long as the waivers were "knowing and voluntary."
52 Fed. Reg. 32,293 (1987); 29 C.F.R. 1627.16(c) (1987).
The regulation identified factors relevant to the de-
termination whether a waiver is "knowing and volun-
tary," but the only mandatory requirements were
that it not apply to prospective fights or claims and
that it not be in consideration for benefits to which
the employee was already entitled. Ibid."
Almost immediately thereafter, Congress ex-
pressed concern about permitting any waivers of
ADEA claims and suggested that the EEOC's "rule
was without legal foundation and contrary to public
policy." H.R. Rep. No. 664, 101st Cong., 2d Sess. 20
(1990) (H.R. Rep. No. 664). Congress suspended op-
eration of the EEOC regulation for fiscal year 1988
and the following two years. See 133 Cong. Rec.
H12,392 (daily ed. Dec. 21, 1987); 134 Cong. Rec. H8297
(daily ed. Sept. 26, 1988); 135 Cong. Rec. H7618 (daily
ed. Oct. 26, 1989). Not with standing Congress's sus-
pension of the regulation, however, some lower courts
___________________(footnotes)
11 The OWBPA ultimately rendered the EEOC'S rule,
permitting unsupervised waivers without the protections of the
OWBPA, of no force or effect. Pub. L. No. 101-433, 202(b),
104 Stat. 984 (1990).
---------------------------------------- Page Break ----------------------------------------
20
ruled that releases were permitted under the ADEA
in certain circumstances. H.R. Rep. No. 664 at 21-22.
In 1990, a legislative proposal in the House of Rep-
resentatives was introduced, similar to one intro-
duced the preceding year, that would have permitted
ADEA waivers, but only where the employee already
had made a claim under the ADEA-and therefore
was fully aware of the rights he or she was waiving.
See H.R. Rep. No. 664 at 5, 7,49-50. Even in such in-
stances, a waiver would have been recognized only if
it had been knowing and voluntary and had met cer-
tain prerequisites similar to those currently con-
tained in the OWBPA. Id. at 5. The House proposal
would have prohibited altogether waivers of ADEA
claims as part of individual early retirement or early
group incentive programs, such as the separation
program at issue in this case. Id. at 7, 52-54. The
House Report explained that older workers can be un-
fairly forced to waive their ADEA rights, especially
in "large-scale terminations and layoffs, where an in-
dividual employee would not reasonably be expected to
know or suspect that age may have played a role in
the employer's decision, or that the program may be
designed to remove older workers from the labor
force." Id. at 22-23.
That House bill eventually gave way to a Senate bill
passed later that year. 136 Cong. Rec. S13,611 (daily
ed. Sept. 24, 1990); 136 Cong. Rec. H8738 (daily ed. Oct.
3, 1990). The Senate bill permitted ADEA waivers in
circumstances not supervised by the EEOC or courts,
but the Senate Report emphasizes that, in lieu of su-
pervision, the significant statutory requirements
must be met. See S. Rep. No. 263 at 31. 12
___________________(footnotes)
12 Although the Senate bill was amended in certain limited
respects subsequent to the completion of the Senate Report
(see, e.g. 136 Cong. Rec. S13,607 (daily ed. Sept. 24, 1990)), the
provisions relevant in the instant case were not altered.
---------------------------------------- Page Break ----------------------------------------
21
The Senate bill also permitted waivers in conjunc-
tion with early retirement or early group incentive
programs, such as the program at issue in this case.
It imposed additional requirements in such circum-
stances, however, regarding the information that
must be provided by the employer to support a valid
waiver. S. Rep. No. 263 at 6. The Senate Report
notes the special issues that arise in the context of
group termination and reduction programs, and em-
phasizes that, in such instances, "the need for ade-
quate information and access to advice before waivers
are signed is especially acute." Id. at 32. As opposed
to individual separation agreements, the terms of
group programs generally are not subject to negotia-
tion between the parties and the affected employees
who are unlikely to have a reason to suspect that the
action is based on their individual characteristics.
Ibid. The Senate Report explains that
[t]he principal difficulty encountered by older
workers in these circumstances is their inability
to determine whether the program gives rise to a
valid claim under the ADEA. In many circum-
stances, an older worker will have no information
at all regarding the scope of the program or its
eligibility criteria. The informational require-
ments set forth in the bill are designed to give all
eligible employees a better picture of these factors.
Id. at 34.
Application of the ratification doctrine to ADEA
waivers that do not comport with the OWBPA's
statutory prerequisites would contravene this in-
tended congressional design. An employee who signs
a purported ADEA waiver that does not afford him the
protections intended by Congress under the OWBPA
would, nonetheless, be bound by that otherwise invalid
waiver if the employee decided to keep the severance
benefits paid to him. But the fact that an employee,
---------------------------------------- Page Break ----------------------------------------
22
such as petitioner, retains benefits paid as part of a
group termination program, does not establish that
the employee has obtained any of the information
about the other employees covered by the program as
mandated by the OWBPA or that any other protec-
tions of the OWBPA. have been afforded the employee.
3. The legislative history of the OWBPA contains
no reference to the doctrine of contractual ratifica-
tion or to case law that invokes that doctrine. Long,
105 F.3d at 1539 n.17. Apparently, at the time the
OWBPA was enacted, no court of appeals had held
that an ADEA waiver that was not knowing and vol-
untary could be ratified through the retention of sev-
erance benefits. 13 Moreover, the Case law relating to
___________________(footnotes)
13 By the time of the enactment of the OWBPA, three re-
ported district courts had discussed the ratification theory in
the context of a purported waiver of ADEA rights, although in
each instance the court relied on that approach as an alterna-
tive theory. See Constant v. Continental Tel. Co., 745 F. Supp.
1374 (C.D. Ill. 1990); O'Shea v. Commercial Credit Corp., 734 F.
Supp. 218 (D. Md. 1990), aff'd, 930 F.2d 358 (4th Cir.), cert.
denied, 502 U.S. 859 (1991); Widener v. Arco Oil & Gas Co., 717
F. Supp. 1211 (N.D. .Tex. 1989). The determinations by the
Fourth and Fifth Circuits that retention of severance benefits
ratifies an ADEA waiver that is not otherwise knowing and
voluntary, postdated enactment of the OWBPA, although both
determinations were initially announced in cases to which the
OWBPA did not apply because the release predated its enact-
ment. See O'Shea v. Commercial Credit Corp., 930 F.2d 358
(4th Cir.), cert. denied, 502 U.S. 859 (1991); (Grillet v. Sears,
Roebuck & Co., 927 F.2d 217 (5th Cir. 1991). The Eleventh
Circuit also addressed the issue in an opinion that followed en-
actment of the OWBPA and which did not apply the OWBPA
because the release predated its enactment, but it reached a
result contrary to the Fourth and Fifth Circuit, disagreeing
with the ratification analysis of bO`Shea and Grillet. Forbus v.
Sears Roebuck & Co., 958 F.2d 1036, 1040-1041 (11th Cir.), cert.
denied, 506 U.S. 955 0992).
---------------------------------------- Page Break ----------------------------------------
23
ADEA waivers that was discussed did not involve any
application of the ratification doctrine. See, e.g., H.R.
Rep. No. 664 at 26-27 (citing cases).
Congress did, however, consider the issue of an em-
ployee's simultaneous retention of severance benefits
and pursuit of an ADEA claim. At least one corpora-
tion raised the concern that it would have to bear the
high costs of litigating ADEA claims even where it
had paid significant consideration for releases as part
of a departure program. See H.R. Rep. No. 664 at 87
(dissenting views); see also S. Rep. No. 263 at 64
(minority views). Thus, it was understood that the
OWBPA would permit an employee who signed an in-
valid waiver to pursue his or her ADEA claim while
retaining the separation benefits paid under the
waiver. See Long, 105 F.3d at 1540 n.19. At one point
a substitute was proposed in committee, apparently in
response to that concern. The substitute would have
required that, if a waiver "is set aside for any reason,
any damages received through a discrimination action
shall be offset by the consideration received for the
waiver," but it was not adopted by the committee.
H.R. Rep. No. 664 at 91 (emphasis added); see also id.,
at 23-30. There was no suggestion that the waiver
would have been ratified by the employee's retention
of the consideration already received.
C. The Court's Decision in Hogue Requires Rejec-
tion of the Tender Back Doctrine Under the
ADEA
The Fifth Circuit has suggested that, even if the
ratification doctrine would not bar an ADEA suit
such as petitioner's, the suit is barred because peti-
tioner did not tender back the severance payments
she had received in conjunction with the invalid
ADEA waiver before she pursued her suit under the
ADEA. See Wamsley, 11 F.3d at 540-542. That ap-
proach is inconsistent with this Court's opinion in
---------------------------------------- Page Break ----------------------------------------
24
Hogue v. Southern Ry., 390 U.S. 516 (1968) (per cu-
riam).
In Hogue, the Court held that an injured employee
was not required to tender back the consideration he
had received from his employer in exchange for a re-
lease of claims before the employee could bring suit
under the Federal Employer's Liability Act (FELA),
45 U.S.C. 51 et seq. As a threshold matter, the Court
made clear that federal law, not state common law
principles, controlled the issue. 390 U.S. at 517. The
Court concluded that requiring a tender back as a
prerequisite to suit under the FELA would be
"wholly incongruous with the general policy of the
Act," i.e., to provide injured employees a right to re-
cover for injuries negligently inflicted by their em-
ployer. Id. at 518. The Court ruled, however, that the
sum already paid by the employer and retained by the
employee must be deducted from the recovery (if any)
obtained through a FELA lawsuit. Ibid.
The Hogue rationale applies with full force to cases
under the ADEA. Long, 105 F.3d at 1541-1544. Like
the FELA, the ADEA is a federal remedial statute
designed to compensate employees for injuries caused
by their employers' conduct and to deter employers
from engaging in such conduct. See McKennon v.
Nashville Banner Publishing Co., 513 U.S. 352,357-
358 (1995) (" [t]he private litigant who seeks redress
for his or her injuries vindicates both the deterrence
and the compensation objectives of the ADEA"). And,
like imposition of a tender back requirement under
the FELA, imposition of such a requirement under
the ADEA would compromise the statute's underly-
ing purposes of compensating victims and deterring
employers. A tender back requirement would enable
an employer to escape sanction for age discrimination
when a terminated employee lacks the resources to
tender back his severance benefits prior to filing
---------------------------------------- Page Break ----------------------------------------
25
suit-a situation not unlikely in the group intended to
be protected by the OWBPA. See H.R. Rep. No. 664 at
23. Few individuals suddenly deprived of their job and
their income would be able to tender back large sever-
ance payments:
Forcing older employees to tender back their sev-
erance benefits in order to attempt to regain their
jobs would have a crippling effect [sic] on the
ability of such employees to challenge releases
obtained by misrepresentation or duress. Such a
rule would . . . encourage egregious behavior on the
part of employers in forcing certain employees into
early retirement for the economic benefit. of the
company. The ADEA was specifically designed to
prevent such conduct * * *.
Long, 105 F.3d at 1541-1542 (quoting Forbus v. Sears
Roebuck & Co., 958 F.2d 1036, 1041 (11th Cir.), cert.
denied, 506 U.S. 955 (1992). And employees who do not
receive the information required under the OWBPA
by the time of the tender decision "would be no better
off than before the OWBPA was enacted; they could be
forced to make critical decisions [whether to
surrender severance pay or waive all claims under the
ADEA] without information deemed essential by
Congress." Id. at 1542. A tender back requirement
would render the OWBPA a nullity by "encouraging]
employers to ignore the specific provisions of the Act
in hopes that by the time their former employees
discover that the releases that they signed are
voidable, they will be in no economic position to
tender back or refuse to accept the special severance
benefits accorded them." Oberg v. Allied Van Lines,
Inc., 59 Fair Empl. Prac. Cas. (BNA) 769, 773 (N.D.
Ill. 1992), aff d, 11 F.3d 679 (7th Cir. 1993), cert. denied,
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26
511 U.S. 1108 (1994); Isaacs v. Caterpillar, Inc., 765 F.
Supp. 1359, 1367 (C.D. Ill. 1991). 14
The fact that the ADEA and its purposes are not
identical to the FELA and its purposes does not pre-
clude application of the Hogue rationale to ADEA
cases:
The mandate of Hogue is that tender back re-
quirements imposed in connection with the release
of federal rights be evaluated in light of the general
policy of the statute in question. That the ADEA
as amended by the OWBPA serves a purpose
distinct from that underlying the FELA does not
change the fact that a tender back requirement is
"wholly incongruous" with the general policies of
the ADEA and the OWBPA. In enacting the
OWBPA, Congress specifically regulated ADEA
releases in order to provide employees with
protection not available at common law. To strip
them of this protection through application of the
common law principle of tender back would be
anomalous indeed.
Long, "105 F.3d at 1541 n.22; but see Wamsley, 11 F.3d
at 542. In Fleming v. United States Postal Serv.
AMF O'Hare, 27 F.3d 259 (7th Cir. 1994), cert. denied,
513 U.S. 1085 (1995), Judge Posner explained that, al-
___________________(footnotes)
14 Respondent's contention (Br. in Opp. 12) that failure to
apply the tender back doctrine in ADEA cases would deter
employers from offering severance benefits misconstrues the
purposes and effect of the OWBPA. The OWBPA's purpose
was to serve as an incentive to an employer to comply with its
requirement of a knowing and voluntary waiver, including the
OWBPA's statutory prerequisites, when the employer obtains
waiver of ADEA claims from their employees. Compliance
with the OWBPA's requirements (which an employer has the
ability to control through the manner in which it drafts re-
leases and offers severance programs) provides an employer
with a defense to a suit alleging violation of the ADEA.
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27
though tender back generally would be a precondition
to rescission of a contract, "[w]hen federal law limits
a class of releases, as in cases under the Federal Em-
ployers' Liability Act, or the closely parallel Jones
Act, or the Age Discrimination in Employment Act,
each of which regulates releases, * * * the common
law rule requiring g tender * * * may have to give
way." Id. at 261. 15 Moreover, although the Fleming
court questioned the breadth of the rule precluding
tender back under any federal law limiting releases, it
emphasized that "for" course a worker who has exe-
cuted a void release should not be barred from chal-
lenging it by his inability to tender back the consid-
eration received, as the effect would be to make the
release enforceable as a practical matter." Ibid.
(emphasis added). 16
___________________(footnotes)
15 The Fleming court declined to exempt Title VII from a
tender back requirement because, in its view, Hogue cannot "be
detached from its context, that of a federal statute that regu-
lates releases, displacing common law rules." 27 F.3d at 261-
262. By so ruling, the court expressly disagreed with Botefur
v. City of Eagle Point, 7 F.3d 152, 155-156 (9th Cir. 1993). That
disagreement is of no consequence in the instant case, however,
because the OWBPA is "precisely such a statute" that regulates
releases, displacing common law rules. Long, 105 F.3d at 1540
n.20.
16 The Fifth Circuit's concern (Wamsley, 11 F.3d at 539
n.9) that, absent a tender back requirement, employees will
finance their lawsuits against employers with funds provided
by the employers, ignores the nature of the statute at issue.
The class of employees protected by the OWBPA is one of the
groups least likely to have the luxury of expending the funds
received (usually severance benefits) on litigation expenses
rather than living expenses because of the unlikelihood of their
finding new employment and the possibility that they may not
yet be entitled to Social Security or other retirement benefits.
See H.R. Rep. No. 664 at 23; see also Long, 105 F.3d at 1543.
And, of course, any employees "with baseless claims have
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28
The Third and Seventh Circuit both have expressly
held that "analogizing the policy of [the] ADEA to
that of [the] FE LA, and thus applying Hogue, is cor-
rect." Oberg, 11 F.3d at 684; Long, 105 F.3d at 1541-
1542 see also Forbus, 958 F.2d at 1040-1041 (applying
Hogue in context of invalid ADEA release that pre-
dated OWBPA); Isaacs v. Caterpillar, Inc., 765 F.
Supp. at 1367. 17 Indeed, courts regularly have ex-
tended the reasoning of Hogue outside the context of
FELA, including to statutes that are not as analo-
gous to FELA as is the ADEA. See Smith v. Pinell,
597 F.2d 994,996 (5th Cir. 1979) (Jones Act, 46 U.S.C.
688); Botefur v. City of Eagle Point, 7 F.3d 152, 156
(9th Cir. 1993) (42 U.S.C. 1983 noting that Hogue "is
generalizable to suits under other federal compensat-
ory statutes"); Wahsner v. American Motors Sales
Corp., 597 F. Supp. 991, 998 (E.D. Pa. 1984) (Auto-
mobile Dealers' Day in Court Act, 15 U.S.C. 1221 et
seq.; emphasizing that benefits under federal statute
may not be denied by state common law rules, and
___________________(footnotes)
strong financial incentives to keep severance payments rather
than risk them in prolonged litigation." Ibid. Further, re-
spondent itself states that it is "undisputed that the overwhelm-
ing majority of plaintiffs enter into contingent fee arrange-
ments with their lawyers, whereby the costs of litigation are
taken from the ultimate recovery." Br. in Opp. 12. Attorney's
fees are available as part of the award in an ADEA suit.
McKennon, 513 U.S. at 357.
17 A panel of the Sixth Circuit also has considered the ques-
tion of tender back, albeit apart from the issue of ratification
(which was not yet ripe due to the remand of the question
whether the release complied with the OWBPA). Raczak v.
Ameritech Corp., 103 F.3d 1257 (1997). The majority of that
panel held that the employees were not required to tender back
the consideration they had received as a precondition to main-
taining their suit under the ADEA. Id. at 1268-1270 (opinion of
Jones, J.); Id. at 1071 (opinion of Guy, J.).
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29
ruling that plaintiffs did not ratify their releases by
failure to tender back); Home Box Office, Inc. v.
Spectrum Elecs., Inc., 100 F.R.D. 379, 382 n.1 (E.D.
Pa. 1983) (communications laws); Taxin v. Food Fair
Stores, Inc., 197 F. Supp. 827,830-831 (E.D. Pa. 1961)
(antitrust law); see also Long, 105 F.3d at 1541 n.21
(citing cases).
As in Hogue, severance benefits retained by the
employee may be offset against any recovery in the
ADEA suit. See Hogue, 390 U.S. at 518. The ADEA
gives federal courts "the discretion to `grant such le-
gal or equitable relief as may be appropriate to effec-
tuate the purposes of [the Act].' " McKennon, 513
U.S. at 357-358. It may be appropriate for a court to
offset initial benefits paid to a particular employee
against the ADEA award to that individual to the ex-
tent the two are duplicative, so long as the relief ul-
timately granted effectuates the purposes of the
ADEA. See Long, 105 F.3d at 1543; Oberg, 11 F.3d at
684.
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30
CONCLUSION
The judgment of the court of appeals should be
reversed and the case remanded for further proceed-
ings. Respectfully submitted.
WALTER DELLINGER
Acting Solicitor General
SETH P. WAXMAN
Deputy Solicitor General
BETH S. BRINKMANN
Assistant to the Solicitor
General
GREGORY C. STEWART
General Counsel
J. RAY TERRY, JR..
Deputy General Counsel
GWENDOLYN YOUNG REAMS
Associate General Counsel
CAROLYN L. WHEELER
Assistant General Counsel
PAUL BOGAS
Attorney
Equal Employment
Opportunity Commission
JUNE 1997